Macau's government has put in two outside executives to help manage a bank accused by the US of laundering money for North Korea.

The move follows a run on Banco Delta Asia, as investors rushed to withdraw their money.

According to the US government, the bank is a primary conduit for money earned by North Korea from counterfeit currency and drug smuggling.

The bank has called FinCEN's accusations a "ridiculous joke".

It has ordered US banks to take special care in any dealings with the bank.

Banco Delta Asia has previously been accused in the media of helping finance Pyongyang's nuclear ambitions

North Korea has just agreed to give up its nuclear weapons programme in exchange for security guarantees and economic aid.

'Willing pawn'

Under legislation passed shortly after the 9/11 attacks, the US Treasury Secretary has the power to designate foreign banks as "institutions of primary money laundering concern".

If we had done these things, the US shouldn't have had to wait until today to accuse us

Stanley Au, Banco Delta Asia

That means that US institutions have to implement special checks whenever entering into any relationship with them - particularly when it comes to correspondent banking relationships.

The effect is to impose severe limits on contact with the US financial system.

In Banco Delta Asia's case, the US Financial Crimes Enforcement Network (FinCEN) said the designation was based on the bank being a "willing pawn" of the North Korean government.

Pyongyang, FinCEN said, used a wide range of front companies and government agencies to profit from drug smuggling, counterfeiting goods and currency, and many other criminal activities.

Edmund Ho is keen to keep confidence in Macau's banks

The proceeds amounted to as much as $500m a year, it said - and for 20 years Banco Delta Asia had provided financial services to the organisations involved, helping them place counterfeit currency, providing access to the international financial system, and allowing surreptitious cash deposits and withdrawals.

Aside from accusations levelled against Banco Delta, FinCen has said Macau's anti-money laundering controls are lax.

'Ridiculous'

In response, Macau - a gambling centre and a territory of the People's Republic of China - said it was investigating the bank, but tried to reassure the citizens desperate to extract their money from it.

"I urge residents to have faith in the financial system of Macau," said Chief Executive Edmund Ho.

"One must verify whether accusations correspond to reality and if they are justified, because without that one should not draw conclusions."

The bank's chairman, Stanley Au, has called FinCEN's accusations a "ridiculous joke".

"During the past 30 years, the trading relationship between our group and North Korea has been openly acknowledged by the monetary authorities of Hong Kong and Macau, as well as agencies in the US," he told reporters.

"If we had done these things, they shouldn't have had to wait until today to accuse us."

He said customers had withdrawn about $38m (£21.3m) on Friday and Saturday - some 10% of the bank's deposits.